A strong Swiss franc stems first and foremost from its role as a safe haven and from lower inflation in Switzerland than abroad, according to the Swiss National Bank (SNB), the country's central bank. The franc's appreciation makes Swiss exports more expensive, but lowers import prices. The SNB manages it through its policy rate, at 0% since June 2025, and, where necessary, through interventions in the foreign exchange market.

Why is the Swiss franc appreciating?

The first driver is the flight to safety. "In times of uncertainty, the franc acts as a safe haven," Martin Schlegel, Chairman of the SNB Governing Board, reminded the General Meeting of Shareholders on 24 April 2026. Upward pressure had intensified at the beginning of 2026, and then again with the escalation of the conflict in the Middle East.

The second driver is the inflation differential. Since 2020, the franc has appreciated markedly in nominal terms, according to the same speech. But prices have risen less in Switzerland than abroad. The strong franc therefore largely offsets this inflation differential.

The third factor works in the opposite direction: interest rates. According to Martin Schlegel, low Swiss interest rates compared with those abroad make the franc less attractive and reduce upward pressure. In September 2026, the franc had thus weakened slightly, mainly because of the gap with the European Central Bank (ECB) and the US Federal Reserve (Fed), which had raised their rates, according to the Keystone-ATS news agency, cited in our article the Swiss franc and SNB interventions.

Then there is the current account. According to the SNB press release of 24 March 2026, Switzerland posted a current account surplus of 62 billion francs in 2025, down 15 billion year on year, mainly because of trade in non-monetary gold. Its net international investment position stood at 966 billion francs at the end of 2025: the country holds far more assets abroad than it has liabilities. The press release itself does not link these figures to the franc's exchange rate.

Strong franc in nominal or real terms: what is the difference?

The nominal exchange rate is the one banks display, for example 0.9253 francs for one euro on 21 October 2026 according to the SNB. The lower this figure, the stronger the franc. The real exchange rate also takes into account the inflation differential with other countries.

This distinction changes the reading. According to Martin Schlegel, the value of the franc has changed little overall in real terms against the euro and the dollar since 2020, despite some fluctuations. A strong franc on the screen therefore does not mean a loss of competitiveness of the same magnitude.

What are the effects for exporters?

For an exporting company, the most visible effect comes through currency conversion. A rising franc reduces the value in francs of sales made in euros or dollars. Givaudan, the Swiss flavours and fragrances group, showed this over the first nine months of 2026: currency effects weighed 4%, or 234 million francs, on sales of 5.89 billion. Its growth of 5.2% fell to 2.6% once expressed in francs.

The effect on the economy as a whole can be heavy. After the minimum exchange rate was discontinued, Fritz Zurbrügg, then a member of the SNB Governing Board, warned on 26 March 2015 that the strength of the franc would "considerably slow Swiss growth" that year. Martin Schlegel also said so in April 2026: the franc's appreciation slows economic growth.

Foreign trade, however, does not respond to the exchange rate alone. According to the Federal Office for Customs and Border Security (FOCBS), exports rose by 2.6% in the third quarter of 2026, to 75.0 billion francs. Yet over that quarter, the franc had rather weakened: according to finews.ch, this decline weighed heavily in the SNB's exchange rate gains at the end of September.

What does a strong franc change for prices and purchasing power?

A strong franc acts as a brake on imported inflation. "The appreciation of the franc dampens inflation. It lowers import prices," Martin Schlegel summed up on 24 April 2026.

Recent statistics point in the same direction. According to the Federal Statistical Office (FSO), the producer and import price index stood at 100.7 points in September 2026 (base December 2025 = 100). It rose by 0.3% month on month, mainly because of petroleum products, but fell by 0.2% year on year.

Consumer price inflation, for its part, has picked up again under the effect of energy: 0.6% in May 2026, 0.8% in August, then 1.5% in October. It remains within the range of 0 to 2% that the SNB equates with price stability. The effect of the policy rate on savings is covered on a separate page.

How does the SNB act on the franc?

The SNB has two levers, described in its monetary policy strategy applied since 2000: the level of interest rates and the franc's exchange rate. Its main benchmark is the conditional inflation forecast. It considers tightening its policy if inflation threatens to exceed 2% on a lasting basis, and easing it if inflation threatens to remain too low on a lasting basis.

The first lever is the SNB policy rate, reviewed at its four quarterly assessments. It is passed on to the money market, as shown by the SARON rate and how it is calculated, at -0.05% on 20 October 2026.

The second lever is intervention in the foreign exchange market. According to a speech by Martin Schlegel on 9 April 2024, the SNB bought foreign currency from 2009 to 2021 to counter the risk of deflation, then sold some after the pandemic to tighten its policy. The 2022 review of the strategy mainly took into account the increased importance of these interventions, according to the April 2026 speech.

These operations have an accounting cost. Foreign currency purchases have greatly inflated the SNB's balance sheet and made its annual result volatile, Martin Schlegel noted in 2024. The first nine months of 2026 illustrate this: out of an SNB profit of 44.2 billion, exchange rate gains reached 29.8 billion at the end of September, compared with 2.5 billion at the end of June.

What historical milestones should be kept in mind?

PeriodDecision or eventSource
2008-2009Start of large-scale interventions, during the global financial crisisSNB, speech of 9 April 2024
2009-2021Foreign currency purchases to counter the risk of deflation, with the rate close to its lower boundSNB, speech of 9 April 2024
6 September 2011 - 15 January 2015Minimum exchange rate of 1.20 francs per euroSNB, speech of 26 March 2015
15 January 2015Minimum exchange rate discontinued, negative rate lowered to -0.75%SNB, speech of 26 March 2015
June 2022 - June 2023Policy rate raised by 250 basis points, up to 1.75%Allnews (AWP), 5 November 2026
2nd half of 2022 - end of 2023Foreign currency sales of 161 billion francsAllnews (AWP), 5 November 2026
2024 - June 2025Policy rate lowered from 1.75% to 0%SNB, speech of 24 April 2026
24 September 2026Rate at 0%, willingness to intervene not stepped upAllnews (AWP), 22 October 2026

According to Fritz Zurbrügg, the minimum exchange rate "significantly supported the Swiss economy" by partially correcting an extreme overvaluation of the franc, before the divergence between the major monetary policies made it impossible to maintain.

A dated example: Martin Schlegel's speech of 5 November 2026

On 5 November 2026, in Zurich, at the conference "The SNB and its Watchers", Martin Schlegel detailed the franc's role in the fight against post-pandemic inflation, according to Allnews, relaying the AWP news agency. When inflation began to rise in 2021, the SNB first reduced its foreign currency purchases. The franc's appreciation then slowed imported inflation.

The SNB then raised its policy rate from June 2022, and sold foreign currency from the second half of 2022. "By the end of 2023, we had sold 161 billion francs' worth, an amount representing almost 20% of GDP," he said. In his view, the resulting appreciation of the franc helped to further curb imported inflation.

The context has since reversed. On 24 April 2026, Martin Schlegel said the SNB was more willing to intervene to counter "a rapid and excessive appreciation of the franc", because of the conflict in the Middle East. On 24 September 2026, the SNB no longer considered it necessary to step up this willingness. Then, on 22 October 2026, the euro fell back below 0.92 francs, the franc's highest level since early July. Views diverge: Valiant bank expects new inflows into the franc, while Union Bancaire Privée (UBP) considers a rate of just under 0.90 francs possible in the medium term. These are projections, not findings. The interplay between the ECB, the euro and the Swiss franc remains one of the levers to watch.

Key figures

  • Minimum exchange rate from 2011 to 2015: 1.20 francs per euro.
  • Foreign currency sold by the SNB from the second half of 2022 to the end of 2023: 161 billion francs, almost 20% of gross domestic product (GDP).
  • Policy rate: 1.75% in June 2023, 0% since June 2025.
  • Exchange rate on 21 October 2026: 0.9253 francs per euro, 0.8245 francs per dollar.
  • Annual inflation: 0.8% in August 2026, 1.5% in October 2026.
  • Switzerland's current account surplus: 62 billion francs in 2025, down 15 billion year on year.
  • Producer and import prices: -0.2% year on year in September 2026.

What we do not yet know

  • The SNB's decision of 10 December 2026: Raiffeisen economists consider a rate rise possible, while the expert Dirk Renkert does not see the SNB as "particularly in a hurry" to raise its rates.
  • Whether the SNB has intervened in the foreign exchange market since 24 September 2026: it has not disclosed this.
  • The quantified effect of the franc's rise in October 2026 on exporting companies, which has not yet been measured.

Recent decisions are tracked in our SNB and rates section. This article does not constitute investment advice.

Sources